Capitalism and Democracy: A Fragile Alliance

236 Pages·2013·3.205 MB·English

by  Theo van de Klundert

Capitalism and Democracy
JohnnyCarbon:Users:JohnnyiMac:Public:JohnnyiMac JOBS:14060 - EE - VAN DE KLUNDERT:VAN DE KLUNDERT 9781781956151 (M3117)
NEW HORIZONS IN INSTITUTIONAL AND EVOLUTIONARY
ECONOMICS
Series Editor: Geoffrey M. Hodgson
Research Professor, University of Hertfordshire Business School, UK
Economics today is at a crossroads. New ideas and approaches are challenging the
largely static and equilibrium-oriented models that used to dominate mainstream
economics. The study of economic institutions – long neglected in the economics
textbooks – has returned to the forefront of theoretical and empirical investigation.
This challenging and interdisciplinary series publishes leading works at the fore-
front of institutional and evolutionary theory and focuses on cutting-edge analyses
of modern socio-economic systems. The aim is to understand both the institutional
structures of modern economies and the processes of economic evolution and
development. Contributions will be from all forms of evolutionary and institu-
tional economics, as well as from Post-Keynesian, Austrian and other schools. The
overriding aim is to understand the processes of institutional transformation and
economic change.
Titles in the series include:
Evolutionary Economics and Environmental Policy
Survival of the Greenest
Jeroen C.J.M. van den Bergh, Albert Faber, Annemarth M. Idenburg and
Frans H. Oosterhuis
Property Rights, Consumption and the Market Process
David Emanuel Andersson
The Evolution of Path Dependence
Edited by Lars Magnusson and Jan Ottosson
Economics, Culture and Social Theory
William A. Jackson
Deep Complexity and the Social Sciences
Experience, Modelling and Operationality
Robert Delorme
Creative Industries and Economic Evolution
Jason Potts
Institutional Variety in East Asia
Formal and Informal Patterns of Coordination
Edited by Werner Pascha, Cornelia Storz and Markus Taube
Capitalism and Democracy
A Fragile Alliance
Theo van de Klundert
Capitalism and
Democracy
A Fragile Alliance
Theo van de Klundert
Tilburg University, the Netherlands
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
JohnnyCarbon:Users:JohnnyiMac:Public:JohnnyiMac JOBS:14060 - EE - VAN DE KLUNDERT:VAN DE KLUNDERT 9781781956151 (M3117)
© Theo van de Klundert 2013
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system or transmitted in any form or by any means, electronic,
mechanical or photocopying, recording, or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing, Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number: 2012953538
This book is available electronically in the ElgarOnline.com
Economics Subject Collection, E-ISBN 978 1 78195 616 8
ISBN 978 1 78195 615 1
Typeset by Servis Filmsetting Ltd, Stockport, Cheshire
Printed by MPG PRINTGROUP, UK
For Michel, to remember somehow
sometime
somewhere
JohnnyCarbon:Users:JohnnyiMac:Public:JohnnyiMac JOBS:14060 - EE - VAN DE KLUNDERT:VAN DE KLUNDERT 9781781956151 (M3117)
Contents
Map and figures ix
Tables xi
Preface xii
Introduction xv
PART I ECONOMIC THEORY IN A HISTORICAL
PERSPECTIVE
1 Emerging markets 3
1.1 The great transformation 3
1.2 Protection of property rights 8
1.3 Compatibility of institutions 15
1.4 Evaluation 21
2 Political economy revisited 25
2.1 The broad picture 25
2.2 Models of rent extraction 29
2.3 History of the US economy 37
2.4 Evaluation 42
3 Engines of growth 45
3.1 From exogenous to endogenous technological
change 45
3.2 General purpose technology 50
3.3 Appreciative theory 55
3.4 Evaluation 64
4 Follow the leader 67
4.1 Copying technology 67
4.2 Catching-up and institutions 73
4.3 Structural transformations 79
4.4 Evaluation 86
vii
JohnnyCarbon:Users:JohnnyiMac:Public:JohnnyiMac JOBS:14060 - EE - VAN DE KLUNDERT:VAN DE KLUNDERT 9781781956151 (M3117)
viii Capitalism and democracy
PART II HISTORICAL DEVELOPMENTS IN A
THEORETICAL PERSPECTIVE
5 The long wave 93
5.1 Measurement, dating, explanation 93
5.2 The financial instability hypothesis 102
5.3 Periodizing capitalism 108
5.4 Evaluation 110
6 A tale of two continents 114
6.1 Forging ahead and catching-up 114
6.2 The welfare state 121
6.3 Varieties of capitalism 128
6.4 Evaluation 134
7 The world economy at large 137
7.1 Conditional convergence 137
7.2 Structuralism 145
7.3 Growth slowdowns 151
7.4 Evaluation 156
8 Democracy at bay 161
8.1 A political trilemma 161
8.2 European unification 167
8.3 China and the world economy 172
8.4 Evaluation 178
Conclusions 182
References 190
Index 201
Map and figures
MAP
1.1 Routes from Paris to Dijon recommended by the Itenéraire
de Bruges, both going through Provins and, alternatively,
avoiding it 10
FIGURES
1.1 A Laffer curve 13
2.1 Scheme of causalities 28
2.2 Rent income (above) and market income (below) 31
2.3 Acemoglu’s dynamic framework 33
3.1 Transition towards the long- run neoclassical equilibrium 46
3.2 Scheme of the expanding varieties model 52
3.3 The structuralist- evolutionary decomposition 56
3.4 A logistic curve of technological change (GPT) 58
3.5 Productivity curves for different patterns of two successive
GPTs 61
3.6 Consecutive curves of GPTs 63
4.1 Convergence according to the neoclassical growth theory 68
4.2 Convergence according to endogenous growth theory 69
4.3 Convergence and divergence according to empirical analysis 71
4.4 Schematic presentation of the main relationships in the
model by Acemoglu et al. (2006) 74
4.5 Catching- up under different regimes 76
4.6 Catching- up in case of a regime- switch failure 77
4.7 Catching- up in case of too early a regime switch 78
4.8 Output and employment shares of the manufacturing sector 81
4.9 Sectoral sources of growth 83
4.10 Relative labour productivity 85
5.1 Comparison between the constructed K- wave (curve 1) and
the smoothed series of world GDP growth rates (curve 2) 94
5.2 The life- cycle of a technological revolution 99
ix